SAN FRANCISCO (CBS SF) – A San Francisco startup that told workers it was cutting off the flow of alcohol in the workplace and issued an email asking them to refrain from sex at the office announced Friday it was cutting its workforce by 17 percent.
In a statement to the New York Times, newly hired Zenefits CEO David Sacks said the company plans to lay off 250 people starting Friday.
“This reduction enables us to refocus our strategy, rebuild in line with our new company values and grow in a controlled way that will be strategic for our business and beneficial for our customers,” Sacks said in the statement.
Sacks said the cut were being made because the company grew too fast “stretching both our culture and our controls.”
The company was once a darling of the Bay Area tech scene earning the coveted designation as a “unicorn” – a startup with a valuation of more than $1 billion.
But questions about its business practices have tamed some that of that enthusiasm. The company has created software intended to make it easier for small businesses to buy health insurance.
Company co-founder Parker Conrad resigned as CEO earlier this month, leading to Sacks’ appointment.
Earlier this week, the firm made headlines not for its product, but its workplace behavior.
According to MarketWatch, Sacks banned alcohol at the workplace last week, as part of a plan to clean up the company’s workplace culture, which has been described as a “frat house.”
Sacks’ announcement of an alcohol ban echoes a memo sent to workers last year that called out more inappropriate behavior among Zenefits employees. The memo was recently obtained by The Wall Street Journal.
“It has been brought to our attention by building management and Security that the stairwells are being used inappropriately….Cigarettes, plastic cups filled with beer, and several used condoms were found in the stairwell. Yes, you read that right. Do not use the stairwells to smoke, drink, eat, or have sex,” wrote Emily Agin, the company’s director of real estate and workplace services.